Irish shares dipped yesterday as market heavyweight CRH fell for a third straight session, though banks were in demand once again.
The Iseq Overall Index ended the session down 0.6pc at 3,070.47 points.
CRH, which accounts for almost 28pc of the index, dipped 2.3pc to €17.90, as investors continued to digest the group's cautious outlook comments in a trading update earlier this week.
Sentiment was not helped by Germany DIY retailer Praktiker's report of disappointing sales figures yesterday. CRH is exposed to the same market through its 48pc stake in DIY group Bauking.
Banking shares continued to march ahead, buoyed by comments from the head of the National Asset Management Agency (NAMA) that discounts on loans bound for the 'bad bank' should exceed previous guidance of 30pc. There had been widespread fears in the market that the 'haircut' would rise above this level, requiring the banks to raise additional capital to reboot their balance sheets.
AIB added 2.5pc to €1.65, while Bank of Ireland gained 1.1pc to €1.71.
Meanwhile, Irish Life & Permanent, which will not participate in the NAMA scheme, inched 0.6pc higher to €3.53. The group was last night finalising a $1.75bn (€1.22bn) bond offering to American and Asian investors as it became the first lender to use the extended guarantee scheme to go out into the market.
Housebuilders Abbey and McInerney rose 1pc and 5.3pc, respectively, as UK rival Persimmon said it had started the year in good shape after seeing a 40pc rise in forward sales on a year earlier. Both of the Irish companies have significant operations in Britain.
National benchmark indexes advanced in nine of the 18 western European markets. France's CAC 40 added 0.2pc, while Germany's DAX decreased 0.3pc.
The UK's FTSE 100 was little changed.
European confidence in the economic outlook jumped in December to a level last seen before the demise of Lehman Brothers, adding to signs that the economic recovery will gather pace this year.
An index of executive and consumer sentiment in the 16-nation euro region rose for a ninth month to 91.3, the European Commission said.
Metro, Germany's largest retailer, lost 4pc, as retail sales in Europe's largest economy unexpectedly fell in November as rising energy costs and unemployment fears kept consumer confidence in check.
Vodafone slid 2.6pc as Verizon, which co-owns its wireless business with the world's largest mobile phone company, yesterday said its 2009 earnings fell 13 cents to 15 cents a share from a year earlier, missing analysts' estimates.